The latest Quarterly House Price Index report indicates a market which continues to exhibit increased trading up activity and price acceleration thanks to strong levels of market demand coupled with supply inelasticity.
The Ulster University research, which has been produced in partnership with the Northern Ireland Housing Executive and Progressive Building Society, analyses the performance of the Northern Ireland housing market during the second quarter of 2021 (April, May and June).
The report reveals an overall average house price of £195,242 which represents a weighted annual level of growth of 9.2% between Q2 2020 and Q2 2021. Where quarterly movements are concerned, the Index displays an increase of 2.8% relative to Q1 2021. This growth remains driven by increased activity, particularly within the semi–detached and detached segments of the market across the region but also as a result of more nuanced increases within the terrace/townhouse and apartment sectors, which have witnessed a rejuvenation in transaction prices.
The report is premised upon 4,138 transactions, the highest volume of transactions recorded in the index in almost two decades, and substantially higher than the 2,829 reported in Q1, 2021 and the 570 presented in Q2 2020 due to the market closure.
The sense of positivity which has encapsulated the NI Housing market post the enforced pandemic closure continued throughout the three months to the end of June 2021. The report’s estate agent survey reaffirms the sense of optimism, with over 70% of agents citing heightened transaction volumes relative to Q1 2021 and 74% reporting heightened levels of enquiries from prospective purchasers. Importantly, more than 80% of the agents surveyed confirmed that increased viewing levels over the quarter had prompted a further increase in the number of properties achieving sale agreed status relative to the previous quarter. The majority of agents expect market buoyancy to continue through into next quarter as the demand/supply imbalance continues to play a dominant role in market dynamics.
Lead Researcher, Dr Michael McCord, Reader in Real Estate, Ulster University said:
“As indicated throughout the previous four reports, the psychological effect of the COVID–19 pandemic upon the housing market is well and truly discernible, with the race for space clearly evident. Indeed, in the first quarter of 2021 we noted the increased competition amongst buyers, with viewings instantaneously translating into firm offers and trading up activity. Moving into the second quarter of the year, this trend has firmly continued with increased house prices and transaction levels.”
Michael Boyd, Deputy Chief Executive & Finance Director Progressive Building Society commented:
“Despite the economic challenges of COVID, the resilience, affordability and changing patterns has seen momentum and confidence continue within Northern Ireland’s housing market throughout the first half of 2021 with the highest level of transactional volumes seen since 2007. While the soon to be phased out stamp duty holiday has been an important contributory factor, further easing of restrictions and a better than expected economic outlook augers well for the market in the coming months with transaction volumes expected to remain consistent with the first half of the year.“The longer–term picture, however, must account for the end of the furlough scheme with the Northern Ireland Executive and the UK Government playing an important role in leading the policy environment to support economic investment and drive consumer confidence.”
Elma Newberry, Assistant Director of Land and Regeneration with the Housing Executive, which commissions the research, said:
“The second quarter of the year saw an exceptional level of activity in the local housing market for a number of reasons including households wanting to trade up for more space, and this contributed to another increase in average prices. Looking ahead, we are mindful of the challenges facing the construction industry because of the availability and cost of materials. New housing supply is an important component of the housing market and the Housing Executive is continuing to work with partners and stakeholders to ensure an appropriate supply of new homes across all tenures.”
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